Deadbeat patients in cross hairs

S.J. General might go after $250 million in unpaid bills

STOCKTON - San Joaquin General Hospital officials are considering using private collection agencies to bring in some cash from the $381 million in bad debt accumulated over the years from patients skipping out on their medical bills.

STOCKTON - San Joaquin General Hospital officials are considering using private collection agencies to bring in some cash from the $381 million in bad debt accumulated over the years from patients skipping out on their medical bills.

These are bills racked up by people who could pay them, officials said. The hospital does provide health care to those who can't afford to pay for it. But those aren't the hospital's only patients, which includes people who have insurance or money to pay their bills.

The hospital's advisory board on Wednesday recommended putting $250 million in debt out to bid in the hopes a collection agency would pay a fraction of the cost and infuse the county hospital with some much-needed cash.

"They're sitting in accounts receivable, so to speak, gathering dust, and we'd be able to get so much on the dollar for them," said Alan Germany, San Joaquin General's interim chief financial officer.

The hospital's Interim Board of Trustees agreed to recommend that the hospital work with other county departments to put the bad debt out to bid. But, before it can be done, discussion at the interim board's meeting showed there would be details to iron out.

At the hospital board's meeting, there was also some discussion brought by the public about the possibility of a gap between the hospital's image as a safety-net hospital and its bidding out the unpaid bills to a collection agency.

It could put somebody in "an endless loop of a commercial collector can't escape from," said Ann Mooney, a field representative for Service Employees International Union Local 1021.

"In this community where foreclosures are abundant, where bankruptcies are abundant ... We're concerned in this community, particularly, that the county would pursue something that in anyway would contribute to our crisis of foreclosure."

But any money that could be brought in by selling the debt - even if it's pennies on the dollar - could be put to use for future patients, Trustee Don Wiley said. "Those would be dollars that would sustain the mission of the hospital and allow us ... to continue to operate," he said. "It kind of works both ways."

Selling off bad debt is common for hospitals to do, even safety-net providers, Germany said.

He notes San Joaquin General has a financial assistance office that works with patients. It collects information, including about incomes, to determine if patients qualify for programs that pay for health care. "We go through an exhaustive process there," Germany said. "There are a variety of funding sources."

The bills that make up the debt had already gone through the hospital and the county's collection process. It was unclear how much that debt would actually be worth.

Trustees and officials did wonder how much the hospital could expect to receive selling off the bad debt, or if there would be any buyer at all for such old debt.